Microsoft to invest $1.7 billion in India

By Reuters

Published: December 7, 2005, 5:59 AM PST

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Microsoft plans to pour $1.7 billion into India over four years and employ another 3,000 people to deepen its presence in the fast-growing software player, Chairman Bill Gates said Wednesday.

About half of the money will be spent on its existing research and development center, its global software delivery unit and expanding to 33 more cities by opening retail outlets.

"We have about 4,000 people (in India). We would be growing that by 3,000 over the next several years," Gates told a news conference.

Many large foreign companies plan more investment in India, attracted by low costs, an educated work force, and an economy forecast to grow 7 percent to 7.5 percent in the fiscal year to March.

Among big technology groups, chipmaker Intel and network equipment maker Cisco Systems have announced billion-dollar investments in the past two months.

In other news:

Microsoft, the world's largest software maker, is tapping into India's booming $17.2 billion software services industry for skilled workers at costs far below average Western salaries.

Gates said Microsoft will focus on research to help the spread of low-cost computing in India, where high entry-level costs limit the spread of computers among its billion-plus people.

Microsoft has launched software in local Indian languages to ride a software boom in the world's second-most-populous country.

Microsoft's plans follow Intel saying Monday it will pour $1.1 billion into its Indian operations, including setting up a venture fund to take stakes in start-ups.

In October, Cisco said it planned to invest $1.1 billion over the next three years and triple its staff numbers in India.

U.S. bank JPMorgan Chase said this week it hopes to hire 4,500 graduates in India over the next two years.